medium · Debt Capital Markets bond-instruments-structures
A bank issues an Additional Tier 1 (AT1) bond with a 'contingent convertible' (CoCo) feature.
Which event would most likely trigger a mandatory conversion of this bond into equity?
- A downgrade of the bank's senior debt to junk
- The bank's share price falling by 50%
- The bank failing to pay a scheduled coupon
- The bank's CET1 ratio falling below 5.125%
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